Tvl.Penta Coal(P)LTD vs. The State Of Tamil Nadu

Held

The Court held that in view of the subsequent legal developments, specifically the Supreme Court's stay on the interim order granted by the Delhi High Court and its decision in Union of India Vs. Mohit Mineral Private Limited, which sustained the constitutional validity of the GST (Compensation to States) Act, 2017, there was nothing left for adjudication in the present writ petitions. The Court reasoned that the basis of the petitioners' claim, which was the interim order from the Delhi High Court, had been nullified by higher judicial pronouncements. Therefore, the writ petitions could not survive. The ratio decidendi is that subsequent Supreme Court judgments that overturn or stay interim orders relied upon by a petitioner render the original writ petition unsustainable.

Facts

The petitioners, Tvl.Penta Coal (P) Ltd. and Tvl.Quantum Coal Energy (P) Ltd., are engaged in the coal business. Prior to the Goods and Services Tax (GST) regime, a Clean Energy Cess was levied on such transactions. Following the implementation of GST, a compensation cess was levied. The petitioners sought to avail input tax credit for the Clean Energy Cess paid by the fourth respondent (Tvl.Gimpex Pvt. Ltd.) on coal prior to July 1, 2017, by relying on an interim order dated August 25, 2017, passed by the Delhi High Court in W.P.(C)No.7459 of 2017. However, during the pendency of these writ petitions, the Supreme Court stayed the Delhi High Court's interim order and subsequently upheld the constitutional validity of the GST (Compensation to States) Act, 2017, in another case.

Key Issues

1. Whether the petitioners are entitled to avail input tax credit for the Clean Energy Cess paid prior to the implementation of the GST Act, 2017, by applying the interim order of the Delhi High Court in W.P.(C)No.7459 of 2017? Petitioner's Contention: The petitioners argued that they should be permitted to avail the input tax paid as cess by the fourth respondent on the Clean Energy Cess prior to the implementation of the GST Act, 2017, with effect from July 1, 2017, by applying the order in W.P.(C)No.7459 of 2017 passed by the High Court of Delhi. Revenue's Contention: The revenue contended that subsequent legal developments, including the Supreme Court's stay on the Delhi High Court's interim order and its upholding of the constitutional validity of the GST (Compensation to States) Act, 2017, rendered the present writ petitions infructuous.